TY  - JOUR
AU  - Carraro,Carlo
AU  - Giavazzi,Francesco
TI  - Can International Policy Coordination Really Be Counterproductive?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2669
PY  - 1988
Y2  - July 1988
UR  - http://www.nber.org/papers/w2669
L1  - http://www.nber.org/papers/w2669.pdf
N1  - Author contact info:
Carlo Carraro
Dipartimento di Scienze Economiche
Università di Venezia
San Giobbe 873
30121 Venezia ITALY
E-Mail: ccarraro@unive.it

Francesco Giavazzi
Universita' Bocconi and IGIER
Via Guglielmo Rontgen, 1
Milan 20136
ITALY
Tel: 0039-02-5836-3304
Fax: 0039-02-5836-3302
E-Mail: francesco.giavazzi@unibocconi.it
AB  - This paper shows that international policy coordination is not counterproductive in a world where the incentive to run beggar-thy-neighbor policies internationally arises from the inefficiency that characterizes, within each country, the interaction between policymakers and private agents. The domestic inefficiency arises from the presence of nominal contracts that give central banks the power to affect real variables. In this setting we show that international cooperation belongs to central banks' dominant strategy. The paper is motivated by a common and misleading interpretation of a paper by Rogoff [1985], namely that international cooperation may be counterproductive in the presence of a domestic inefficiency.
ER  -